Rajiv Gandhi Equity Savings Scheme- New Deduction Introduced

A new section 80CCG is introduced for deduction upto Rs 25000. This scheme would allow for income tax deduction of 50% to new retail investors, who invest up to Rs 50000 directly in equities & whose annual income is below Rs 10 lakh. The lock in period for this scheme would be 3 years. From Financial year 2013-14, a resident whose gross total income for a year is up to Rs 12 lakh, can claim deduction under this scheme. This deduction can be claimed by a resident individual who has not opened a demat account & has never made […] Read more

Fixed Deposit or Debt Funds- where to invest?

All of us know about fixed deposits, so first lets see the meaning of debt funds. Debt fund is a mutual fund which mainly invests in a mix of debt or fixed income securities such as treasury bills, government securities, etc. They have generally fixed rate of interest and fixed maturity date. Fixed deposits are generally preferred by risk averse investors.

1. Debt funds are more tax efficient than fixed deposits.
In fixed deposits, if your income increases to Rs10k or more then bank will deduct 10.,3% from your income & amount of fixed deposit is taxed every year irrespective of its […] Read more

Negative Returns are being earned by your Fixed Deposits

Holders of fixed deposits have been earning a negative return in actual terms for most of the former five years
To make issues shoddier, depositors continue to be taxed on this ostensible income.
Bank fixed deposits have never been tax friendly; the level of compliance has been sketchy. But compliance is slowly getting stricter. In the past, RBI norms required banks to take into account deposits in one branch for the purpose of tax deduction at source—a rule which allowed depositors to break up FDs across branches to avoid TDS.
Several private banks allowed customers to break up FDs and route them into […] Read more

Why the rupee may fall to 70 against dollar

The Indian rupee improved stridently on Tuesday after key regulators took steps to restrain speculative trading in the currency, but some gains were knocked off in minutes and the currency was back below the psychological barrier of 60.
The principal problem seems to be India’s huge current account deficit, which hit a record high 4.8 per cent of gross domestic product in fiscal year 2013.This deficit was being financed by foreign money for last many years, but as the U.S. economy gathers momentum, there is increasing likelihood that the Federal Reserve will taper its bond buying programme (also called quantitative easing) […] Read more

Errors to be avoided while filing income tax return

1) Availing of deduction twice
This error is commonly committed by salaried taxpayers. If you had switched jobs during the previous financial year, you might have got the Form 16 from both employers. While the first company may have deducted the tax correctly, the second might have deducted very little. It would have considered only the income for the rest of the year and given you the basic exemption of Rs 2 lakh, as also the deduction under Section 80C. However, these must have already been factored in by the previous company.
But you cannot escape by ignoring the previous income in […] Read more

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